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EUR / USD is holding above 1.21

The EUR / USD pair is trading in a fairly limited range today after volatile trading on Monday. Traders have adjusted their positions ahead of the decisive stages of trade negotiations between the UK and the EU, and now took a wait and see attitude.

 

Both sides noted progress in the negotiations, but the most contentious issues remain unresolved. On Monday evening, British Prime Minister Boris Johnson said that whatever the outcome, the negotiations will be completed before the end of this year and will not be extended. The UK wants to conclude an agreement with the EU, but not at any cost.

 

In the near future, news about the course of trade negotiations will increase its influence on the EUR / USD pair. The market's reaction will depend on the incoming information.

 

A fairly strong short-term impact on the European currency today may have the ZEW institute index for Germany and the interim data on the EU GDP for the 3rd quarter.

 

In the United States, the focus remains on negotiations between Republicans and Democrats on the formation of a new package of economic stimulus measures. Both sides announced progress in the negotiations, but have not yet named a possible date for the adoption of the program. The US government this week may approve a new temporary stimulus package worth $ 908 billion to give lawmakers more time to negotiate. Any stimulus measures in the US will obviously increase the pressure on the American currency, therefore, despite all the problems in the EU, the dollar has little chance of strengthening in the medium term. Only unsuccessful Brexit negotiations can turn the EUR / USD pair down.

 

Buyers were able to keep the price above 1.2100 yesterday, so today the currency pair has good chances of renewing its upward movement and at least a retest of resistance at 1.2165. This scenario will be canceled in case of a breakdown of the support at 1.2100. This will signal the development of a downward movement towards 1.2050.

 

  • Resistance levels: 1.2165, 1.2200, 1.2250.

 

  • Support levels: 1.2100, 1.2050, 1.2000.

 

The main scenario is growth to 1.2165 and higher.

 

An alternative scenario is a breakdown of the support at 1.2100 and a decline to 1.2050.

 

The current fundamental outlook is neutral. We consider longs with moderate risks from the level of 1.2100

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